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2 days ago
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Analysis-Argentine leader Milei licking his chops ahead of October elections
By Nicolás Misculin BUENOS AIRES (Reuters) -Argentina's firebrand right-wing President Javier Milei has largely tamed runaway inflation with a ruthless austerity plan and he aims to solidify power when his party and its allies take on a divided opposition in legislative elections in October. The trash-tweeting, shaggy-haired economist, who famously handed tech billionaire Elon Musk a chainsaw at an event in Washington earlier this year, has overseen a steady dollar-peso peg but relies on legislative allies in Congress to pass his agenda. Many of the changes he has implemented have been through presidential decrees, like his ideological ally, U.S. President Donald Trump, who called Milei his favorite president. Voters will choose about half the seats in the lower chamber of Argentina's Congress and a third of the upper Senate on October 26. A big victory would not give Milei a legislative majority, but it would offer him leverage to make deals to sell off government-owned companies, cut social spending, change tax and labor policy and embrace social conservatism. That plan is in stark contrast to the program of the parties that are the ideological descendants of General Juan Peron, who ruled the country from 1946-1955 and 1973-1974, and his wife Evita. Their governments nationalized industries, unveiled pro-labor policies and rolled out social programs including free health care. The economic stability spurred by Milei, who took power in late 2023 and quickly slashed spending as part of a shock therapy program to pull the South American country out of a deep crisis, has not translated into across-the-board improvements. Prices of basic goods like jeans and tennis shoes are reportedly double what they are in other parts of the Americas. Pensioners continue to protest the cost of living, and anger over the relatively poor salaries of healthcare workers at a respected pediatric hospital has turned into a months-long saga. Nearly 40% of Argentines remain in poverty, and many of them reject Milei's policies. "I'm not a Peronist, but I'll vote for them because I'd vote for anyone before Milei," said Jorge, a 42-year-old "cartonero" who collects cardboard for recycling, an extremely poor living. The man, who declined to give his last name, said one of his four children was treated at the pediatric hospital where staff are protesting. Posing another threat to Milei's popularity is the possibility that he may in coming months have to further tighten economic policy to meet the terms of a $20 billion International Monetary Fund loan that has boosted Argentina's reputation among investors, whose dollars the country desperately needs. 'RUPTURE IS INEVITABLE' Up for grabs in the election is the vast province surrounding the capital, Buenos Aires, which is the geographic heart of Peronism and home to 40% of the country's voters. A government source told reporters Milei has vowed to defeat Peronist Governor Axel Kicillof there. Milei's candidate unexpectedly placed first in a recent Buenos Aires local election, and consulting firm Observatorio Electoral shows Milei's Libertad Avanza party with a slim 37%-36% advantage over the center-left Peronists. Nationally, 42% of voters favor Milei against 23% for the Peronists. Beating the standard-bearers of Juan Peron's legacy would have seemed impossible a few years ago, but with inflation down to a projected 30% this year, from 118% last year, and Milei credited with cutting corruption, some voters are ready to give the political firebrand more power. "I'll vote for Milei again because he's achieved a degree of normality in the economy," said Federico Segovia, a 22-year-old university student who blamed the last Peronist president, Alberto Fernandez, for leaving the economy in disastrous shape. A recent survey by the consulting firm Synopsis found that the share of those who viewed Milei positively rose to 43.4% in May from 40.9% in April. Perhaps the biggest wind in Milei's sails comes from the power struggle that has pitted Kicillof and his one-time mentor, former President Cristina Fernandez de Kirchner. Kicillof, who served as economy minister in Fernandez de Kirchner's government from 2013 to 2015, is expected to run for president in the 2027 election. "The rupture is inevitable," a Peronist source told Reuters. The two opposition politicians are still debating whether they will join forces for the congressional elections. "If there is no agreement for the legislative elections and Peronism is divided, La Libertad Avanza will win the elections in the province of Buenos Aires," the source said. Milei, meanwhile, has patched over divisions with his closest ideological neighbor, agreeing to offer a combined list of candidates with the center-right PRO party. The Peronists make up the largest party in Congress and have dozens of governors and mayors across the country. Observatorio Electoral pollster Julio Burdman, however, thinks that power base won't be enough to stop Milei's forces. "The ruling party has all the conditions" to win the most votes, he said. "I can't imagine any other result."
Yahoo
2 days ago
- Business
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Analysis-Argentine leader Milei licking his chops ahead of October elections
By Nicolás Misculin BUENOS AIRES (Reuters) -Argentina's firebrand right-wing President Javier Milei has largely tamed runaway inflation with a ruthless austerity plan and he aims to solidify power when his party and its allies take on a divided opposition in legislative elections in October. The trash-tweeting, shaggy-haired economist, who famously handed tech billionaire Elon Musk a chainsaw at an event in Washington earlier this year, has overseen a steady dollar-peso peg but relies on legislative allies in Congress to pass his agenda. Many of the changes he has implemented have been through presidential decrees, like his ideological ally, U.S. President Donald Trump, who called Milei his favorite president. Voters will choose about half the seats in the lower chamber of Argentina's Congress and a third of the upper Senate on October 26. A big victory would not give Milei a legislative majority, but it would offer him leverage to make deals to sell off government-owned companies, cut social spending, change tax and labor policy and embrace social conservatism. That plan is in stark contrast to the program of the parties that are the ideological descendants of General Juan Peron, who ruled the country from 1946-1955 and 1973-1974, and his wife Evita. Their governments nationalized industries, unveiled pro-labor policies and rolled out social programs including free health care. The economic stability spurred by Milei, who took power in late 2023 and quickly slashed spending as part of a shock therapy program to pull the South American country out of a deep crisis, has not translated into across-the-board improvements. Prices of basic goods like jeans and tennis shoes are reportedly double what they are in other parts of the Americas. Pensioners continue to protest the cost of living, and anger over the relatively poor salaries of healthcare workers at a respected pediatric hospital has turned into a months-long saga. Nearly 40% of Argentines remain in poverty, and many of them reject Milei's policies. "I'm not a Peronist, but I'll vote for them because I'd vote for anyone before Milei," said Jorge, a 42-year-old "cartonero" who collects cardboard for recycling, an extremely poor living. The man, who declined to give his last name, said one of his four children was treated at the pediatric hospital where staff are protesting. Posing another threat to Milei's popularity is the possibility that he may in coming months have to further tighten economic policy to meet the terms of a $20 billion International Monetary Fund loan that has boosted Argentina's reputation among investors, whose dollars the country desperately needs. 'RUPTURE IS INEVITABLE' Up for grabs in the election is the vast province surrounding the capital, Buenos Aires, which is the geographic heart of Peronism and home to 40% of the country's voters. A government source told reporters Milei has vowed to defeat Peronist Governor Axel Kicillof there. Milei's candidate unexpectedly placed first in a recent Buenos Aires local election, and consulting firm Observatorio Electoral shows Milei's Libertad Avanza party with a slim 37%-36% advantage over the center-left Peronists. Nationally, 42% of voters favor Milei against 23% for the Peronists. Beating the standard-bearers of Juan Peron's legacy would have seemed impossible a few years ago, but with inflation down to a projected 30% this year, from 118% last year, and Milei credited with cutting corruption, some voters are ready to give the political firebrand more power. "I'll vote for Milei again because he's achieved a degree of normality in the economy," said Federico Segovia, a 22-year-old university student who blamed the last Peronist president, Alberto Fernandez, for leaving the economy in disastrous shape. A recent survey by the consulting firm Synopsis found that the share of those who viewed Milei positively rose to 43.4% in May from 40.9% in April. Perhaps the biggest wind in Milei's sails comes from the power struggle that has pitted Kicillof and his one-time mentor, former President Cristina Fernandez de Kirchner. Kicillof, who served as economy minister in Fernandez de Kirchner's government from 2013 to 2015, is expected to run for president in the 2027 election. "The rupture is inevitable," a Peronist source told Reuters. The two opposition politicians are still debating whether they will join forces for the congressional elections. "If there is no agreement for the legislative elections and Peronism is divided, La Libertad Avanza will win the elections in the province of Buenos Aires," the source said. Milei, meanwhile, has patched over divisions with his closest ideological neighbor, agreeing to offer a combined list of candidates with the center-right PRO party. The Peronists make up the largest party in Congress and have dozens of governors and mayors across the country. Observatorio Electoral pollster Julio Burdman, however, thinks that power base won't be enough to stop Milei's forces. "The ruling party has all the conditions" to win the most votes, he said. "I can't imagine any other result."
Yahoo
22-05-2025
- Business
- Yahoo
Where's the beef? Argentine steak exports slide as strong peso inflates costs
By Nicolás Misculin BUENOS AIRES (Reuters) - In the Villarroel meat plant outside Buenos Aires, workers skillfully butcher cuts of Argentine beef, popular with restaurants from Shanghai to New York. But the country's steak exports are now sliding as costs rise on a stronger local peso. In the first four months of the year, beef exports fell nearly 20% year-on-year to around 255,000 tons, according to government agency Senasa. Shipments to price-sensitive top buyer China plunged to 137,000 tons from 203,000 tons a year earlier. Chinese importers - which gobbled up two-thirds of Argentina's beef exports last year - are paying around $5 per kilogram, packers say, cutting into their margins as local costs have risen alongside the peso. "We can't compete," Yahir Auad, a manager at the meat-packing plant's wider group, said at the factory in the city's suburbs. Last month, President Javier Milei eased years-long currency controls as part of his effort to stabilize Argentina's economy, a move long sought by investors. But a stronger peso has pushed up relative costs and hit what had for years been a competitive edge for some Argentine firms, affecting exporters as well as sectors like tourism as the country has become more expensive in dollar terms. "We've got more exchange-rate stability now, but that stability hasn't benefited us exporters," Auad said. "It costs us $4 or $4.50 (per kilo) to produce the raw material, to which we have to add expenses and taxes." The tough situation for Argentina's meat packers - that include Minerva's Swift, Quickfood, owned by Brazilian giant Marfrig, and others - represents a challenge for Milei even as Argentina emerges from years of economic tumult, overspending and market distortion. "Argentine beef is today the most expensive in Latin America in dollar terms," said Miguel Schiariti, director of meat-packing chamber Ciccra, citing the cost of a cut of tenderloin at the equivalent of some $4.70 in Argentina versus $3.60 in Brazil and $3.50 in Uruguay. "The meat-packing industry and the production industry will go bankrupt in this environment," he said. MEAT PACKERS CUT STAFF Argentina - known for its ranches, barbecue grills and huge per capita consumption of steaks - has some 53 million head of cattle and is among the top five global exporters of beef, usually sending higher quality cuts to Europe and North America, and cheaper cuts to China. However, exporters are finding it increasingly difficult to place their products on the international market. "Everyone is struggling to be profitable," said Miguel Jairala, an analyst with the ABC chamber of meat exporters. ABC says some meat-packing plants have begun cutting staff, in some cases more than 10% of the workforce. "Deals aren't being closed, with production costs high compared to the prices paid in China. Brazil has the potential to offer the same product, even better quality than ours, at a more competitive price," said Jairala. Auad said high taxes, including a 6.75% tariff firms had to pay when exporting, also contributed to the pain the sector was facing. Industry groups are lobbying the government to lower taxes. Argentina's Secretariat of Agriculture did not respond to a Reuters request for comment. "We had to close our (other) Las Heras meat packing plant because we couldn't fulfill the contracts," Auad said. "We sold at a certain price and were never able to fulfill the orders." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
05-05-2025
- Business
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In Milei's Argentina 'economic miracle', not everyone's a winner
By Nicolás Misculin BUENOS AIRES (Reuters) -Christian Bialogurski, 35, often spends 12 hours a day teaching communications classes at schools in the Buenos Aires suburbs, sometimes not eating until he returns home at night to save costs. The Argentine's monthly salary - in a good month the equivalent of $450 - covers his travel and rent of some $270, but little more. "It's not enough. I don't have any money left by the 15th of the month. I sometimes ask my mom for food," said Bialogurski in his modest suburban home in Loma Hermosa on the outskirts of Buenos Aires. "You have to endure the hunger." The policies of libertarian President Javier Milei have done much to stabilize Argentina's long turbulent economy. Its notoriously high inflation has cooled, its currency controls have been torn down and it has notched its first budget surplus in 14 years. Milei's supporters and many in the market have cheered it as an "economic miracle." But for some Argentines, adjusting to this new reality has been painful. Cuts to state spending have hit pension pots and public sector infrastructure projects. State workers, including teachers, have seen their incomes dwindle, as Milei has prioritized development of the private sector in industries like energy and mining. Public sector salaries fell over 15% in real terms in the year after Milei took office in December 2023, a report from local consultancy CTA Autónoma calculated. For those in the private sector, the news is better, with their salaries now outpacing inflation - up over the same period around 3.3% in real terms. "Salaries aren't enough, and it's hard to make ends meet, but the drop in inflation in recent months has brought more predictability regarding expenses," said Julieta Battaglia, a 43-year-old accountant in the private sector in Buenos Aires. "Now at least prices don't all increase week by week." RISE IN INFORMAL SECTOR Unemployment and poverty both spiked initially under Milei, but have since improved as the country emerged from recession. The jobless rate ended last year at 6.4%, slightly higher than when Milei took office. Argentina policy think-tank the IPyPP said that the rate of self-employed work has risen, however, creating a large group of people who in many cases lack social security, making them more vulnerable. Informal workers earn some 41% less than formal workers in the same sector, said Roxana Maurizio, a researcher specializing in employment at state science research council Conicet. For them, having a job was "no insurance against poverty," she added. That subtle weakening of the job market contributed to an over 10% drop in supermarket consumption last year, official data show, and has stoked unrest, with regular protests against austerity. "If you add all the temporary jobs that lack social security and are very low-paying, unemployment in Argentina is not just some 7%, but rises to 30%," said Agustín Salvia, a poverty expert at the Catholic University of Argentina. The Ministry of Labor did not respond to requests for comment from Reuters. Milei's administration has brushed off criticism, arguing that fiscal adjustment was essential and that as inflation has come down salaries are improving in real terms. As well as teachers and state workers, construction jobs have been hit by cuts to state spending on railways and roads, while deregulation to allow more imports has affected some local manufacturing of products like cars, as stiffer competition has eroded margins. "For new models, the costs we are now facing aren't totally competitive," said Ramón Ramírez, executive director of auto parts maker Maxion Montich. "So decisions are probably being made to import components rather than produce locally." Protests have become a weekly event. In one in April, pensioners held up signs saying "Retirees don't give up. Milei out." "My pension is 270,000 pesos ($251). It's not enough to buy meat or pay for utilities," said 69-year-old retiree Ricardo Bouche. "I can't even buy my medication. I had prostate cancer surgery two years ago, and they've left me without medicine."
Yahoo
19-03-2025
- Business
- Yahoo
Argentina IMF deal faces key vote in Congress
By Nicolás Misculin BUENOS AIRES (Reuters) - Argentina's Congress started debating and will likely vote on a potential new deal between the South American country and the International Monetary Fund (IMF) on Wednesday, a key hurdle for the program the country needs to gets its finances in order. The lower Chamber of Deputies began debate on Wednesday morning on a decree issued by President Javier Milei's government earlier this month that supported a new IMF program. Congress can block the decree if both chambers vote against it. The country, which is battling with negative net foreign currency reserves after years of over-spending, currency crises and regular defaults, is the IMF's biggest borrower with 22 loan programs to date. It is still repaying a 2022 $44 billion deal. The government says a new deal is needed to help bolster the central bank's accounts and allow the country to move towards undoing capital controls that have been in place since 2019 and that it says stymie business and investment. Milei's libertarian party has only a small minority in Congress, but he has pushed through some of his agenda by winning over conservative and moderate allies. The party is confident it will get enough support for the IMF decree. "I support this though with a critical eye. I will vote in favor," moderate Peronist opposition lawmaker Miguel Pichetto told reporters on Wednesday. "I have a critical view of the DNU (decree). I think it lacks explanations... but I think we need to think primarily about Argentina." Milei, a political outsider who won a shock election in 2023 pledging to end years of economic crisis in Argentina, has lowered inflation and overturned a deep fiscal deficit, but now faces the challenge of reviving growth and rebuilding state coffers. The IMF deal will test Milei's ability to win over legislative support. He angered some lawmakers by pushing the deal via a presidential decree rather than through a regular bill in Congress. His tough austerity and spending cuts have also increased poverty rates and triggered protests against his government, especially by hard-hit pensioners. A regular weekly protest was expected later on Wednesday outside Congress.
